Growth rate of boutique hotels puts segment in good position for recovery

by | 08 May 2020 | General News

Philadelphia’s beautiful skyline. (Photo from Unsplash)

Learn more on how the boutique hotel segment can capitalise on its popularity to bounce back from the Covid19 impact.

Strong growth in 2019 and continued popularity with guests could mean that the boutique hotel segment of the hospitality market is the most likely to rebound and even continue to grow following the current and ongoing coronavirus crisis. We take a look at this particular segment and its future projections.

Boutique bounceback

2019’s numbers for boutique hotels spell good news ahead for this particular area of the hospitality industry. The industry at large has been brought to its knees by the coronavirus lockdowns, with hotels, restaurants and bars shuttered indefinitely, with many likely to remain so even when the lockdown lifts.

However, boutique hotels are one segment of the hospitality market that looks set to make a swift recovery, judging by their positioning and the segment’s growth in the final quarter of 2019. Research conducted by The Highland Group says that boutique hotels in the US should bounce back relatively quickly once the restrictions are eased and that strong performing boutique brands would also be poised to open new properties within the next two or three years.

Rising figures in the US

The Boutique Hotel Report 2020, The Highland Group’s output from its research, showed that boutique hotels had been the fastest growing sector of the hotel industry for the third year running, outpacing extended stay and upscale hotels, traditionally the leading segments in American hotel development.

Boutique hotels, which encapsulates independent brands and operators, as well as soft brands and lifestyle hotels, grew by 10.6% in 2019 compared to 3.7% and 6.9% respectively for upscale and extended stay.

Authentic connection and trust

Numbers aside, the angle of lifestyle and boutique hotels makes them natural leaders in the post-Covid hospitality landscape. Guests, visitors and tourists are going to be hard to win back, and any potential guests will need to feel like they can trust the proprietors and operators, and perhaps this trust is more easily won in a more bespoke setting.

The model of boutique hotels in terms of their more intimate engagement with the customer, as well as their curated local experience and atmosphere that is perhaps more associated with normal living as opposed to the typical functional hotel model, might be more appealing after the coronavirus threat has passed.